EXCHANGE
      AGREEMENT

    


    THIS
      EXCHANGE AGREEMENT, dated as of June __, 2008, is
      made
      by and between Lattice Incorporated, a Delaware corporation (“Company”),
      and
      Barron Partners LP, a Delaware Limited Partnership (the “Holder”).

    


    WHEREAS,
      the Holder is the owner of 7,861,698 shares of the Company’s Series A Preferred
      Stock (the “Series A Preferred”) and 1,955,132 Warrants A to purchase shares of
      the Company’s common stock with an exercise price of $0.35 per share expiring
      9/19/2011 registered pursuant to an SB2 registration statement filed on 2/12/07
      and subsequently amended. (the “Registered Warrant”).

    


    WHEREAS,
      the Holder also owns 10,544,868 unregistered Warrants A to purchase shares
      of
      the Company’s common stock with an exercise price of $0.35 per share expiring
      9/19/2011, 12,500,000 Warrants B to purchase shares of the Company’s common
      stock with an exercise price of $0.875 per share expiring 9/19/2011 and
      1,900,000 warrants to purchase shares of the Company’s common stock with an
      exercise price of $0.50 expiring 2/8/2012(collectively, the “Unregistered
      Warrants”).
      

    


    WHEREAS,
      pursuant to the Certificate of Designation, the Conversion Price of the Series
      A
      Preferred, as adjusted in accordance with Section 7(c) of the Certificate of
      Designation is currently $0.161 per share and the Conversion Ratio is
      3.5714;

    


    WHEREAS,
      the Company and the Holder currently desire that the Holder return the
      Unregistered Warrants to the Company for cancellation;

    


    WHEREAS,
      in consideration for the cancellation of the Unregistered Warrants, the Company
      desires to issue 520,000 of its newly designated Series C Preferred Stock
      (“Series C Preferred”) to the Holder, 5,200,000 shares of the Company’s common
      stock will be issuable to the Holder upon conversion of the Series C Preferred
      shares owned by the Holder;

    


    NOW,
      THEREFORE, for good and valuable consideration, the receipt and sufficiency
      of
      which the parties hereby acknowledge, the parties agree as follows:

    


    1. a. Cancellation
      and Reissue of Warrants.
      The
      Company and the Holder agree that the Holder will return the Unregistered
      Warrants to the Company for cancellation. The Company and the Holder also agree
      that the Holder will return the Registered Warrants to be reissued by the
      Company with the same terms as currently stated within 5 days of the
      receipt.

    


    b. Filing
      of Certificate of Designation and Issuance of Series C shares.
      The
      Company and the Holder agree that upon the return and cancellation of the
      Unregistered Warrants, the Company shall within five (5) days of the signing
      of
      this Agreement, file the Certificate of Designation for the Series C Preferred,
      a copy of which is annexed hereto as Exhibit A, such that each share of Series
      C
      Preferred shall be convertible into 10 shares of the Company’s common stock
      subject to adjustment pursuant to the Certificate of Designation. Upon the
      effectiveness of the Certificate of Designation, the Company shall promptly
      issue certificates to the Holder representing the Series C Preferred
      shares.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3. Further
      Assurances.
      In
      connection with the exchange and the cancellation of the Unregistered Warrants
      and amendment to the Certificate of Designation, the Holder, by entering into
      this Exchange Agreement, agrees to execute all agreements and other documents
      as
      reasonably requested by the Company. 

    


    4. Investor
      Representations and Warranties and Covenants.
      The
      Holder represents, warrants and covenants to the Company as
      follows:

    


    a.
       No
      Registration.
      The
      Holder understands that the Series C Preferred Shares have not been, and will
      not be, registered under the Securities Act of 1933, as amended (the
“Securities
      Act”)
      by
      reason of a specific exemption from the registration provisions of the
      Securities Act, the availability of which depends upon, among other things,
      the
      bona fide nature of the investment intent and the accuracy of such Holder’s
      representations as expressed herein or otherwise made pursuant
      hereto.

    


    b. Investment
      Intent.
      The
      Holder acquired the Series C Preferred Shares, for investment for its own
      account, not as a nominee or agent, and not with the view to, or for resale
      in
      connection with,
      any
      distribution thereof, and such Holder has no present intention of selling,
      granting any participation in, or otherwise distributing the same. Such Holder
      further represents that it will not violate the Securities Act and does not
      have
      any contract, undertaking, agreement or arrangement with any person or entity
      to
      sell, transfer or grant participation to such person or entity or to any third
      person or entity with respect to the Preferred Shares.

    


    c. Investment
      Experience.
      Such
      Holder has substantial experience in evaluating and investing in private
      placement transactions of securities in companies similar to the Company and
      acknowledges that such Holder can protect its own interests. Such Holder has
      such knowledge and experience in financial and business matters so that such
      Holder is capable of evaluating the merits and risks of its investment in the
      Company. 

    


    d. Transfer
      Restrictions.
      The
      Holder acknowledges that the shares of the Company’s common stock issuable upon
      conversion of the Series C Preferred have not been registered under the 1933
      Act, and may not be transferred unless (i) they are subject to a current and
      effective registration statement under the 1933 Act, or (ii) the Investor shall
      have delivered to the Company an opinion of counsel, which counsel and opinion
      shall be reasonably satisfactory to the Company, to the effect that the
      securities to be sold or transferred may be sold or transferred pursuant to
      an
      exemption from such registration; and (b) any sale of the securities made in
      reliance on Rule 144 promulgated under the 1933 Act may be made only in
      accordance with the terms of said Rule, to the extent that such Rule is
      applicable.

     

    e. Access
      to Data.
      The
      Holder and its advisors, if any, have been furnished with or have been given
      access to all materials relating to the business, finances and
      operations of
      the
      Company and any reasonably requested materials requested by the Holder. The
      Holder and its advisors, if any, have been afforded the opportunity to ask
      questions of the Company and its management and have received complete and
      satisfactory answers to any such inquiries. 

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    f. Accredited
      Investor.
      The
      Holder is an “accredited investor’ within the meaning of Regulation D, Rule
      501(a), promulgated by the Securities and Exchange Commission under the
      Securities Act and shall submit to the Company such further assurances of such
      status as may be reasonably requested by the Company. 

    


    g. Restrictive
      Legend. The
      Holder acknowledges and agrees that the Series A Preferred Shares and the shares
      of the Company’s common stock issuable upon conversion of the Series C Preferred
      Shares shall bear a restrictive legend and a stop-transfer order may be placed
      against transfer of any such securities except that the requirement for a
      restrictive legend shall not apply to shares sold pursuant to a current and
      effective registration statement or a sale pursuant Rule 144 or any successor
      rule

    


    h. Authorization.

    


    i. The
      Holder has all requisite power and authority to execute and deliver this
      Exchange Agreement, and to carry out and perform its obligations under the
      terms
      hereof. All action on the part of the Holder necessary for the authorization,
      execution, delivery and performance of this Exchange Agreement, and the
      performance of all of the Holder’s obligations herein, has been
      taken.

    


    ii. This
      Exchange Agreement, when executed and delivered by the Holder, will constitute
      valid and legally binding obligations of the Holder, enforceable in accordance
      with its terms except: (i) as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium and other laws of general application affecting
      enforcement of creditors’ rights generally, and (ii) as limited by laws relating
      to the availability of specific performance, injunctive relief or other
      equitable remedies or by general principles of equity.

    


    iii. No
      consent, approval, authorization, order, filing, registration or qualification
      of or with any court, governmental authority or third person is required to
      be
      obtained by the Holder in connection with the execution and delivery of this
      Exchange Agreement by the Holder or the performance of the Holder’s obligations
      hereunder.

    


    i. Tax
      Advisors.
      Such
      Holder has reviewed with its own tax advisors the U.S. federal, state, local
      and
      foreign tax consequences of this investment and the transactions contemplated
      by
      this Exchange Agreement. With respect to such matters, such Holder relies solely
      on such advisors and not on any statements or representations of the Company
      or
      any of its agents, written or oral. The Holder understands that it (and not
      the
      Company) shall be responsible for its own tax liability that may arise as a
      result of this investment or the transactions contemplated by this Exchange
      Agreement.

     

    j.  All
      parties acknowledge and represent that: (a) they have read this Exchange
      Agreement; (b) they clearly understand the Exchange Agreement and each of its
      terms; (c) they fully and unconditionally consent to the terms of this Exchange
      Agreement; (d) they have had the benefit and advice of counsel of their own
      selection; (e) they have executed this Exchange Agreement, freely, with
      knowledge, and without influence or duress; (f) they have not relied upon any
      other representations, either written or oral, express or implied, made to
      them
      by any person; and (g) the consideration received by them has been actual and
      adequate.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    k.  This
      Exchange Agreement contains the entire agreement and understanding concerning
      the subject matter hereof between the parties and supersedes and replaces all
      prior negotiations, proposed agreement and agreements, written or oral. Each
      of
      the parties hereto acknowledges that neither any of the parties hereto, nor
      agents or counsel of any other party whomsoever, has made any promise,
      representation or warranty whatsoever, express or implied, not contained herein
      concerning the subject hereto, to induce it to execute this Exchange Agreement
      and acknowledges ands warrants that it is not executing this Exchange Agreement
      in reliance on any promise, representation or warranty not contained
      herein.

    


    l.  This
      Exchange Agreement may not be modified or amended in any manner except by an
      instrument in writing specifically stating that it is a supplement, modification
      or amendment to the Exchange Agreement and signed by each of the parties
      hereto.

    


    m.  Should
      any provision of this Exchange Agreement be declared or be determined by any
      court or tribunal to be illegal or invalid, the validity of the remaining parts,
      terms or provisions shall not be affected thereby and said illegal or invalid
      part, term or provision shall be severed and deemed not to be part of this
      Exchange Agreement.

    


    n.  This
      Exchange Agreement shall be governed by and construed in accordance with the
      laws of the State of New York, without regard to principles of conflicts of
      laws. Any action brought by either party against the other concerning the
      transactions contemplated by this Agreement shall be brought only in the state
      courts of New York or in the federal courts located in the state of New York.
      Both parties, and the individuals executing this Exchange Agreement and other
      agreements on behalf of the Company, agree to submit to the jurisdiction of
      such
      courts and waive trial by jury. The prevailing party shall be entitled to
      recover from the other party its reasonable attorney’s fees and costs.


    


    o.  This
      Exchange Agreement may be executed in counterparts, each of which, when all
      parties have executed at least one such counterpart, shall be deemed an
      original, with the same force and effect as if all signatures were appended
      to
      one instrument, but all of which together shall constitute one and the same
      Exchange Agreement.

    


    


    


    


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    IN WITNESS
      WHEREOF, the parties have caused this Exchange Agreement to be duly executed
      by
      their respective officers thereonto duly authorized as of the day and year
      first
      above written.

     

    


    
      	
              LATTICE
                INCORPORATED

               

               

            
	
              By:__________________________________________

                Name:
                Paul Burgess

               
                Title: Chief Executive Officer

            


    

     

     

    
 

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
      PAGES FOR HOLDERS TO FOLLOW]

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    [SIGNATURE
      PAGE OF HOLDERS TO LATTICE INCORPORATED EXCHANGE AGMT]

    


    Name
      of
      Holder: BARRON
      PARTNERS LP

    By:
      Barron Capital Advisors, LLC, its General Partner 

    


    


    


    By:________________________________

    Andrew
      Barron Worden

    Managing
      Partner 

    730
      Fifth
      Avenue, 25th Floor

    New
      York
      NY 10019